Johnson Controls sets Q4 restructuring, pension charges
DETROIT (Reuters) -- Interiors and battery supplier Johnson Controls Inc. said on Monday it will report a pre-tax charge between $225 million and $275 million in the fourth quarter as it cuts jobs and consolidates factories.
The company also will post a separate one-time charge between $425 million and $475 million related to a change in its method for recognizing pension and post-retirement expenses.
An economic slowdown in Europe, higher lead costs and weak battery demand have pressured the company, a leading supplier of vehicle batteries, to review its cost structure.
The supplier, in a statement, said it expects the restructuring of its automotive, building efficiency and power solutions business units to be completed over the next two years.
"JCI is the first of the auto companies to announce restructuring actions in Europe, but we believe it will not be the last," said Guggenheim Securities analyst Matthew Stover .
A Johnson Controls spokesman declined to say how many jobs would be cut or if any plants would be closed. Employee-related costs will be between $180 million and $210 million.
The disclosure comes a month after Johnson Controls said it would remove lead processing and cut jobs at its Shanghai battery plant following a report from Chinese officials that tied the plant to lead pollution that sickened 49 children.
The Shanghai Municipal Environmental Protection Bureau said the Johnson Controls plant was "mainly responsible" for the lead pollution, according to an official government website. Johnson Controls said it stood by its environmental performance.
The action prompted Johnson Controls to increase its tax valuation allowance by $30 million to $35 million, the company said on Monday.